20230810-西牛证券-南旋控股-01982.HK-More_than_a_knitwear_supplier_11页_454kb

Nameson (01982.HK) - Company Overview

Nameson is a Hong Kong-listed company established in 1990, primarily involved in knitwear manufacturing. Knitwear products contribute approximately 79.7% of total revenue, with an annual production of around 29.2 million pieces in fiscal year 2023, up from previous years. Average selling price (ASP) increased due to rising raw material costs. The company also produces cashmere yarn (780 tons in 2023, generating HKD 543.7 million revenue, or 11.8% of total revenue) and is exploring fabric manufacturing in Vietnam to diversify. Key customers include Uniqlo (contributing nearly half of revenue through traditional knitwear and wholegarment products), Tommy Hilfiger, Calvin Klein, and Land’s End. Operations are global, with factories in China (Huizhou and Hebei), Vietnam (large-scale production, GFA >130,000 sq. m.), and Myanmar (under development with a recorded impairment loss).

Financial Performance

• Revenue has grown steadily from 2019 to 2023, reaching HKD 4.6 billion in fiscal year 2023, with a year-on-year growth rate averaging around 13.9%. Gross margin decreased from 18.2% in 2021 to 16.2% in 2023, while net profit declined sharply from HKD 298.4 million in 2021 to HKD 158.3 million in 2023, with negative year-on-year growth of -42.6%. Profitability metrics like ROE fell from 13.2% to 6.2%.
• Financial ratios show moderate liquidity and debt levels, with a debt-to-equity ratio of 37.8% in 2023. Dividend payments have ranged from HKD 98.0 million to HKD 150.4 million in recent years.

Key Risks

• Currency risk from RMB appreciation against USD, squeezing profit margins due to low bargaining power on raw materials.
• Rising borrowing costs amid higher interest rates, with the weighted average effective interest rate jumping from 1.75% to 4.63% in 2023.
• Operational risks include low utilization rates for fabric production and past impairment losses from Myanmar factory construction.
• Reliance on key customers and labor costs could pose challenges.

Expansion and Diversification

• The company is expanding production abroad to mitigate risks, with plans to grow knitwear output in Vietnam. Vietnam-based operations now produce over half of knitwear, with a designed fabric capacity of 30 million pounds annually. Myanmar factory construction is near completion, aiming to reduce reliance on China.

Peer and Market Comparison

• Ranked against peers like Crystal International and Shenzhou Intl., Nameson's market cap is HKD 1.0 billion. Its valuation metrics, such as P/E and P/B, are comparable to industry averages but lag in some areas like debt-to-equity and profitability growth.